Finance Bill 2022
Finance (No. 2) Bill 2021-22 was published on 4 November 2021.
Finance (No. 2) Bill 2021-22 was published on 4 November 2021.
On 4 November 2021, Finance (No. 2) Bill 2021-22 was published. For simplicity we will refer to the Bill as ‘Finance Bill 2022’. Following up on our Budget special edition, we are including commentary on a number of key pieces of legislation in this edition of Tax Matters Digest. The Finance Bill incorporates legislation on measures announced at Autumn Budget 2021 as well as measures for which draft legislation was published previously. The second reading of the Bill is scheduled to take place on 16 November 2021. At the time of writing no details have been published on the exact timetable for the passage of the Bill following its second reading.
You can find further commentary on some of the key legislation in Finance Bill 2022 in this edition of Tax Matters Digest as follows:
- Income tax basis period reform and earlier payment of tax;
- Creative sector tax reliefs; and
- Reform of the UK Tonnage Tax regime.
Other measures of note in the Bill are discussed briefly below.
Asset Holding Company regime
The Finance Bill includes the full legislation for the Asset Holding Company (AHC) regime, which is intended to increase the competitiveness of the UK as a holding company location for investment funds and institutional investors and will be effective from 1 April 2022. Based on an initial review, the legislation included in the Finance Bill reflects changes to clarify various aspects of the regime, as well as a number of changes to points of detail that will need to be reviewed. However, the overall framework of the regime and the key benefits available to a Qualifying Asset Holding Company (QAHC) remain broadly as expected and its introduction is a very welcome development.
Pensions
Enabling provisions have been tabled in Finance Bill 2022 so that required changes to pensions tax legislation can be made under regulation at a later date to implement the policy intent announced in the recent Budget. The process and implementation for this is still being considered by the Government and the detail in the forthcoming regulations will be closely scrutinised by those members affected, public service pension schemes and employers.
Further measures of interest to businesses
In addition to the above, Finance Bill 2022 includes legislation relating to the reduction in the banking surcharge, the new Residential Property Developer Tax and the extension to the temporary increase in the annual investment allowance, as covered in our Autumn Budget special edition of Tax Matters Digest. Several other measures for businesses announced at the Budget are also included in the Finance Bill, including notification of uncertain tax treatments, Diverted Profits Tax and the interaction with Corporation Tax closure notices, the abolition of cross-border group relief and proposed changes to the UK Real Estate Investment Trust (REIT) regime. The Finance Bill legislation on REITs includes some additional provisions around limited partnerships including confirmation that where the institutional investor is a limited partnership there is a requirement for the partnership to meet the Genuine Diversity of Ownership condition.
